Chicago still doing business with company that admitted to defrauding the city

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After defrauding the city in 2007 and admitting to it in court, Chicago lumberyard owner Donald Beal continues reaping millions of dollars in sales to the city, and Beal’s lawyer wants to keep it that way.

Beal was granted immunity three years ago for testifying in a whistle-blower case against former city trades supervisor Kevin O’Gorman. Prosecutors accused O’Gorman of using Beal’s company, Arrow Lumber Co., to bill the city for $50,000 worth of materials provided to O’Gorman personally, including cabinets, countertops, flags and carpenter supplies.

Cook County Judge Steven Goebel acquitted O’Gorman in the case, but accused Beal, who had already been given immunity by prosecutors, of the crime. “Mr. Beal did get on the stand, admitted to defrauding the city, but obviously blamed (O’Gorman),” Goebel wrote in his verdict. “I find parts of Mr. Beal’s testimony absolutely dishonest and unbelievable.”

Despite the assertion of the judge that Beal was the responsible party in the fraud, the city continues to do business with Arrow. This year, the city has already paid the company $300,000 as part of a 5-year contract potentially worth as much as $50 million.

Only after the Chicago Tribune requested Arrow documents from the city on Sept. 20 under the Freedom of Information Act, did the city begin the official process of removing the company from its approved vendor list. The city’s Department of General Services recommended that Arrow be disbarred from further business with the city some six months after the trial was concluded, but officials claim they need more time to wade through the paperwork.

In the meanwhile, Arrow is still selling materials to the city. In November, the Chicago Park District awarded Arrow with a $500,000 contract for roofing tools and materials. As a minority-owned business, Arrow has been given preferred treatment in contract awards, despite defrauding the city in the past.

Chicago Tribune

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